Advances in VA Utilization and Cost Data Mark W. Smith Paul Barnett Todd Wagner VA HSR&D National Meeting February 16, 2005

Health Economics Resource Center Outline Overview DSS NDEs vs. HERC average cost data DSS intermediate product data NPPD prosthetics data 4. Fee Basis data Health Economics Resource Center

Health Economics Resource Center VA Utilization Study objectives and data needs Non-VA Utilization Patient costs Health Economics Resource Center

Health Economics Resource Center HERC Annual Person-level costs VA Utilization Encounter Level DSS Intermediate Product Specialty care: e.g., prosthetics Health Economics Resource Center

Health Economics Resource Center Rehab, MH, LTC HERC Annual Person-level costs Bedsecn Med/surg Discharge HERC Opat VA Utilization Encounter Level Pharmacy DSS TRT DSS Intermediate Product Discharge Specialty care: e.g., prosthetics Opat Health Economics Resource Center

Health Economics Resource Center Rehab, MH, LTC HERC Annual Person-level costs Bedsecn Med/surg Discharge HERC Opat VA Utilization Encounter Level Pharmacy DSS TRT DSS Intermediate Product Discharge Specialty care: e.g., prosthetics Opat Health Economics Resource Center

Health Economics Resource Center easy PTF Bedsection files Rehab, MH, LTC hard Med/surg PTF Main files easy Discharge HERC NPCD Outpatient easy very hard PTF Bedsection files TRT DSS Discharge easy PTF Main files Opat moderate NPCD Health Economics Resource Center

Health Economics Resource Center Fee Basis Paid by VA Contract Care Non -VA Utilization Medicare/ Medicaid Not paid by VA Private Insurance Out of pocket Health Economics Resource Center

HERC vs DSS Todd Wagner

Health Economics Resource Center HERC or DSS Strategies for choosing dataset Cost determination method VA versus non-VA Relative value units Ease of use Health Economics Resource Center

Cost Determination Method DSS costs are created using an activity-based costing allocation method HERC is created using a mixture of methods Advantage: Inpatient: DSS Outpatient: Tie Health Economics Resource Center

Health Economics Resource Center RVU-based decision DSS is based on VA relative value units (RVUs); hospitals can modify RVUs HERC is based on non-VA RVUs (mostly Medicare) Advantage: depends on audience (slight advantage to HERC) Health Economics Resource Center

Health Economics Resource Center Ease of Use HERC annual person level is easy to use HERC discharge dataset merges to PTF main Has subtotal costs and LOS for HERC categories Advantage HERC Caveat: HERC may not exist forever Health Economics Resource Center

Health Economics Resource Center Accuracy Is one more accurate? Don’t confuse precision and accuracy Health Economics Resource Center

Health Economics Resource Center Accuracy Hard to quantify accuracy of cost data Quality changes over time Varies by medical center and type of care True costs are unknown Comparisons to other VA or non-VA costs (construct validity) Understand the production costs Health Economics Resource Center

Health Economics Resource Center Outliers DSS is more subject to outliers than HERC DSS tries to weed out high cost outliers in production data Health Economics Resource Center

Identifying Inpatient Outliers Decompose the discharge data Rehab, MH, LTC: Calculate a per diem cost Multiply per diem by LOS Compare estimated cost to cost Med/surg Calculate cost per DRGwt per day; flag records with >$50000 Health Economics Resource Center

Health Economics Resource Center Summary Choice of data should be based on: The precision you need Level of detail Your audience Choose a primary database (HERC or DSS) Don’t mix and match DSS and HERC Except for HERC with DSS pharmacy Health Economics Resource Center

Health Economics Resource Center Accuracy and Outliers No easy solution Consider: Comparing costs to other another cost dataset Investigate DSS production data Check accuracy of outliers Health Economics Resource Center

Health Economics Resource Center Remainder of Workshop DSS Intermediate Product data: - Greater granularity on procedures National Prosthetics Patient Database (NPPD): - Only source of prosthetics information: cost, type, patients - Essential for rehab studies, polytrauma patients Fee Basis data: - Non-VA costs excluded from HERC average cost data - Most non-VA costs excluded from DSS - Useful for studying outsourcing of care, home-based care Health Economics Resource Center

DSS Intermediate Product Detail: Looking Inside the Black Box Paul G. Barnett PhD Shuo Chen PhD Health Economics Resource Center

DSS National Data Extracts National files available at VA national computing center in Austin, TX Hospital stays Bed section segment of a stay Days in outpatient clinic Day of outpatient pharmacy Dispensed prescriptions Health Economics Resource Center

Data in DSS National Data Extracts Total cost of an encounter Some subtotals Health Economics Resource Center

Health Economics Resource Center Study questions Where to DSS cost estimates come from? Are they accurate? What is importance of previously identified limitations? Health Economics Resource Center

Where do DSS data come from? DSS VISN Level Production Databases (a “Black Box” to most researchers) Cost of intermediate products, stays, visits Extracts of DSS- SAS Files at Austin Cost of stays and visits Health Economics Resource Center

Where do DSS data come from? DSS allocates cost to departments DSS finds quantity of services and products from VISTA (VA electronic medical records) DSS assigns set of Relative Value Units (RVUs) to each service and product Health Economics Resource Center

Health Economics Resource Center Intermediate product The products (and services) used during a hospital stay or an outpatient encounter, e.g.: Days in ward Number of chest x-rays Minutes in operating room Health Economics Resource Center

Where do DSS data come from? DSS combines department costs with count of products and RVUs DSS determines the cost of each intermediate product DSS sums the costs of all intermediate products used in a stay or visit Health Economics Resource Center

Previously identified problems with DSS cost estimates “Million dollar” products. Unit costs errors Encounters assigned extremely high costs Health Economics Resource Center

Previously identified problems (cont.) Missing medical procedures At some sites inpatient medical procedures not recorded in a way that can be extracted by DSS Medical procedures: endoscopy, cardiac catheterization (expensive procedures not recorded in surgical software package) May result in an underestimate of costs of some hospital stays and outpatient visits Health Economics Resource Center

Looking inside the “black box” Goals: Evaluate if unit cost outliers affect cost estimates Identify if DSS used information on inpatient medical procedures to assign cost Where procedure data are missing, find the effect on cost estimates Health Economics Resource Center

Evaluation of DSS cost estimates of stays involving medical procedures Study population: Clinical trial participants who had cardiac angioplasty Method: Obtained detailed data on cost of each product used in inpatient stays (2001-2002) Compared to corresponding record in DSS NDE Studied stays with angioplasty according to PTF Evaluated intermediate products of these stays Health Economics Resource Center

Access to DSS Intermediate Product Detail In production level data (in the black box) No national level extract of intermediate products (data set would be too large) Access granted by each medical center Alternative: DSS national program office can extract detail Health Economics Resource Center

Access to DSS Intermediate Product Detail Requested data from DSS national program office Hoped to pilot test method for future use by other researchers 2 year wait to obtain these data Probably not a viable strategy for other researchers DSS office not funded to do this work System not designed to extract data on a cohort Health Economics Resource Center

Comparison of intermediate product detail to national data extract Costs in intermediate product data nearly matched national data extracts (NDE) A very few records for products with costs greater than $30,000 had been excluded in tabulating costs to prepare NDE Evidently “high cost outliers” are filtered out in preparing NDE Appropriate to exclude these values Health Economics Resource Center

Evaluation of intermediate products on cost estimates Study of inpatient stays with cardiac angioplasty Identified 158 inpatient stays in which angioplasty took place according to Patient Treatment File (PTF) Identified whether stay had intermediate products for “angioplasty”, “PTCA”, or “catheterization”, etc. Matched stay to “wage index” assigned to geographic area by Medicare Health Economics Resource Center

Health Economics Resource Center Evaluation of inpatient costs using intermediate products on cost estimates Mean cost of a stay was $11,941 55/158 stays (35%) had at least one angioplasty product Regression Dependent variable: DSS cost Independent variables: length of stay, wage, days in ICU, and whether DSS included an angioplasty intermediate product Stay with at least one angioplasty product were assigned $7,404 greater cost Health Economics Resource Center

Health Economics Resource Center Study limitations Hard to evaluate cost or quantity of an intermediate product products may be characterized differently at each site, according to work processes and organization Uncertain if we identified all angioplasty products e.g., generic names: minutes in ambulatory surgery VA continues to improve methods since study time frame (2001-2002) Health Economics Resource Center

Improved inpatient procedure reporting New VA mandate that cardiac procedures be recorded as data (not just text) Health Economics Resource Center

A new way to look into the black box Intermediate Product Department (IPD) Detail One record with costs incurred in each IPD (Production Unit) during the stay/visit Gives sum of cost of all products from the department Does not give quantity or cost of intermediate products Both inpatient and outpatient files Located at Austin Not yet documented Will allow researchers to estimate cost subtotals Health Economics Resource Center

Health Economics Resource Center Conclusions DSS is excluding “million dollar products” in building the NDE Incomplete data on inpatient procedures may result in significant underestimate of the cost of some hospital stays Health Economics Resource Center

Health Economics Resource Center Recommendations Is accurate estimate of cost of stays involving inpatient procedures important to study? See DSS IPD extract to see if costs assigned to appropriate intermediate product department Health Economics Resource Center

Health Economics Resource Center Recommendations Alternatives Use HERC cost estimates as primary, especially if data are several years old. Conduct sensitivity analysis using HERC estimates Estimate a cost function with DSS data and use it to simulate missing cost data Health Economics Resource Center

Health Economics Resource Center Alternatives (cont.) Estimate costs using DSS cost function Estimate cost function Data: stays that have costs based on appropriate IPD Independent variables: Use clinical characteristics, LOS, days in ICU, wage index, etc. Predict costs based on clinical characteristics In our example, we would have added about $7,400 to cost estimates Health Economics Resource Center

The Fee Basis (FEE) files Mark W. Smith, PhD Adam Chow, B.A.

Overview of Fee Basis Program Pays for care at non-VA facilities in three situations: VA cannot provide the care locally It is economical to do so Travel to a VA facility is medically infeasible Health Economics Resource Center

Overview of Fee Basis Program Limited emergent care: - no more than 10-day supply of Rx - inpatient only until transfer is medically feasible, typically 3 days or less Full range of services covered Health Economics Resource Center

Overview of Fee Basis Program Some common uses: Community nursing home care Home-based care E.g.: long-term oxygen therapy Compensation & pension exams Health Economics Resource Center

Health Economics Resource Center Fee Basis files Subset of all VA contract care Most “sharing agreement” care from affiliate universities is not included Substantial non-VA utilization unaccounted for Health Economics Resource Center

Health Economics Resource Center Fee Basis Payments FY2003 Service type Fee Basis Payments Frequency Inpatient 116,000 stays $ 545 m Non-Rx Outpatient 5,418,000 visits $ 477 m Rx 15,000 scripts $ 0.6 m TOTAL $ 1,023 m Health Economics Resource Center

Names of Fee Basis Files - I Hospital stay MDPPRD.MDP.SAS.FEN.FYyy.INPT Ancillary services provided to inpatients MDPPRD.MDP.SAS.FEN.FYyy.INPT.ANCIL Outpatient services MDPPRD.MDP.SAS.FEN.FYyy.MED Payments to pharmacies MDPPRD.MDP.SAS.FEN.FYyy.PHR Health Economics Resource Center

Names of Fee Basis Files - II Travel expenses MDPPRD.MDP.SAS.FEN.FYyy.TVL Pharmacy vendor file MDPPRD.MDP.SAS.FEN.FYyy.PHARVEN Other vendors file MDPPRD.MDP.SAS.FEN.FYyy.VEN Veterans with FEE cards (long-term users) MDPPRD.MDP.SAS.FEN.FYyy.VET Health Economics Resource Center

Highlights of Patient Data Scrambled SSN Primary Service Area (PSA) 3-digit station number County, state, zip Health Economics Resource Center

Highlights of Clinical Data Outpatient: Date of service 1 CPT procedure code Inpatient: Start and end dates of invoice period Up to 5 surgery codes Up to 5 ICD-9 diagnosis codes (*no decimal*) Health Economics Resource Center

Highlights of Financial Data Amount claimed Amount paid Medicare prospective payment amount (inpatient) Many variable relating to FMS record-keeping: invoice date, processing date, check number, etc. Health Economics Resource Center

What Data Rows Represent Each row of data represents a service provided for a particular date (outpatient) or time period (inpatient) TREATDT: Outpatient date of service TREATDTF: Inpatient start of invoice period TREATDTO: Inpatient end of invoice period Health Economics Resource Center

Highlights of Vendor Data Vendor ID Address (city, state, zip) Related VA station number Payment totals by month, not by patient or service Health Economics Resource Center

Health Economics Resource Center Finding Cases Search all relevant variables: Place of service (PLSER) Treatment code (TRETYPE) Purpose of visit (FPOV) Cautions: Variable values can change year to year Missing values Health Economics Resource Center

Creating Discharge Records (1) Goal: Create a single discharge record from multiple inpatient service (INPT) records Method: Concatenate by SCRSSN using TREATDTF and TREATDTO. Health Economics Resource Center

Creating Discharge Records (2) Records are typically processed within 30 days of invoicing. BUT Invoices may be sent LONG after services are rendered. THEREFORE To find all services in a fiscal year, look in the Fee Basis files in that year and the 2 following years. Health Economics Resource Center

Creating Discharge Records (3) Searching for records: Outpatient: TREATDT Inpatient: TREATDTF, TREATDTO Use vendor ID (VENDID) to track particular facilities Health Economics Resource Center

Creating Discharge Records (4) Cautions Watch for outliers: extremely long stays If a stay appears to end on September 30, check the October records Stays may end with a transfer to VA – look for VA record Health Economics Resource Center

Health Economics Resource Center Other Notes There is repetition across variables: state appears twice, some dates appear in both Julian and SAS formats Blank fields are common. They could mean “not applicable” as well as “missing.” Health Economics Resource Center

Overlap with Other VA Files Community nursing home care also in DSS outpatient files PTF Extended Care files Most completed hospital stays also in PTF Non-VA Hospitalization files Health Economics Resource Center

Health Economics Resource Center HERC Technical Report A HERC technical report on Fee Basis data can be found on the HERC web site at http://www.herc.research.med.va.gov/publications/ technical_reports.asp Health Economics Resource Center

Questions on Fee Basis files? Health Economics Resource Center

National Prosthetics Patient Database (NPPD) Ciaran Phibbs, PhD Mark W National Prosthetics Patient Database (NPPD) Ciaran Phibbs, PhD Mark W. Smith, PhD Pon Su, MA

Health Economics Resource Center NPPD Description Contains records of prosthetics dispensed in VA e.g. glasses, hearing aids, artificial limbs, stents, metal fixtures Data drawn from VISTA and Denver Distribution Center records Available FY1998 – present Health Economics Resource Center

Health Economics Resource Center Selected Variables Patient ID (links to SSN) Location of service HCPCS code & item description Quantity dispensed Cost estimate Health Economics Resource Center

Additional Notes on NPPD NPPD date refers to the day the record was entered, NOT to date of service! There is no service date. Costs may vary by site due to local contracts. Used items automatically assigned 50% of new cost. Health Economics Resource Center

NPPD vs. Utilization Files (1) HERC compared NPPD records to major utilization databases: Outpatient: OPC, DSS NDE Inpatient: PTF, DSS NDE Purpose: To determine validity of NPPD Health Economics Resource Center

NPPD vs. Utilization Files (2) Idea: Prosthetics should be dispensed in an encounter that is recorded in a utilization record. Health Economics Resource Center

NPPD vs. Utilization Files (2) Method Use date of outpatient NPPD record Look –30 to +30 days around outpatient visit in NPCD (OPC) for a related clinic stop Result Only about 50% of records match Poor correspondence for inpatient records Health Economics Resource Center

NPPD vs. Utilization Files (3) Result Only about 50% of records match! Poor correspondence for inpatient records Potential Causes Need to use longer window: -30 to +90 days ? Blind rehab units report using ward stock – not tied to individual patients. Weak incentive for accurate data entry Health Economics Resource Center

Health Economics Resource Center Recommendations NPPD is a work in progress It does not list every prosthetic It does not have a service date Potential use: estimating purchase cost of new prosthetic items, locally or nationally Health Economics Resource Center

Health Economics Resource Center References Contents: VIReC Insights 2001;2(3)) Comparison to utilization files: HERC technical report (in progress) Health Economics Resource Center

Health Economics Resource Center Access to NPPD Contacts Frederick Downs, MD (VACO) Liz Kiley, NPPD data manager (Hines) Process Submit request to Frederick Downs with project description, IRB approval, list of variables needed Health Economics Resource Center

Questions on NPPD files? Health Economics Resource Center